As early as 1934/35, General Heinz Guderian envisioned two basic types of armor to act as the lead elements of the future German Panzer Divisions. The first vehicle was to be armed with an anti-tank gun and two machine guns while the second one was to be a support vehicle, armed with a larger caliber gun. The first one eventually became known as the Panzerkampfwagen III, which was to be a standard tank for the three light companies of a tank battalion. The second vehicle became known as Panzerkampfwagen IV.

In 1935, development orders for a 15-ton fully-tracked vehicle based on the specifications set down by the Waffenamt (the Ordnance Department) were issued to MAN (Nurnberg), Daimler-Benz AG (Berlin-Marienfelde), Rheinmetall-Borsig (Berlin) and Krupp AG (Essen). In order to maintain secrecy, the new vehicle was known as the Zugfuhrerwagen (ZW) - platoon commander's vehicle. The vehicle was designated Versuchkraftfahrzeug 619, Mittlerer Traktor (Medium Tractor) and 3.7cm Geschutz-Panzerwagen.

The Panzerkampfwagen III's development arose from a conflict between the Waffenamt and the Inspector for Mechanized Troops over the vehicle's main armament. The Waffenamt selected and was satisfied with 37mm gun, while the Inspector for Mechanized Troops demanded a larger 50mm gun. In the end, the 37mm gun was chosen as the main armament for the new vehicle. The decision was based on the fact that the infantry was already equipped with the standard 37mm Pak 35/36 L/45 anti-tank gun, so only one gun and one type of ammunition needed to be produced. The turret and turret ring was still capable of mounting a heavier gun orginally envisaged by the Inspector for Mechanized Troops. Armored protection was to be heavier in the front of the vehicle than the rear, since the new vehicle was to be used in forward elements of the assault tank formations. The top speed was specified to be 40km/h. and the vehicle was to be operated by a crew of five men, with a commander, gunner and loader in the turret and driver and radio operator in the forward part of the hull. Communication between crewmembers was handled through the use of an intercom system, the first German tank to be equipped with such a device. Later on, all of the Panzers were equipped with this system which proved to be very effective during combat. Sold Out!